MIRA INFORM REPORT

Report Date :

26.10.2012

IDENTIFICATION DETAILS

Name :	NICHIA CORPORATION
Registered Office :	491 Oka Kaminakacho Anan City Tokushima-Pref 774-8601
Country :	Japan
Financials (as on) :	31.12.2011
Date of Incorporation :	December 1956
Com. Reg. No.:	Not Available
Legal Form :	Limited Company
Line of Business :	Manufacturer of phosphors for CRT, light emitting diodes, LED
No. of Employees :	6,808

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – June 30^th, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
Japan	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

japan - ECONOMIC OVERVIEW

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop a technologically advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Japan's industrial sector is heavily dependent on imported raw materials and fuels. A tiny agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. Usually self-sufficient in rice, Japan imports about 60% of its food on a caloric basis. Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch. For three decades, overall real economic growth had been spectacular - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the after effects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2011 stood as the fourth-largest economy in the world after second-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2011. A sharp downturn in business investment and global demand for Japan's exports in late 2008 pushed Japan further into recession. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake in March disrupted manufacturing. Electricity supplies remain tight because Japan has temporarily shut down almost all of its nuclear power plants after the Fukushima Daiichi nuclear reactors were crippled by the earthquake and resulting tsunami. Estimates of the direct costs of the damage - rebuilding homes, factories, and infrastructure - range from $235 billion to $310 billion, and GDP declined almost 0.5% in 2011. Prime Minister Yoshihiko NODA has proposed opening the agricultural and services sectors to greater foreign competition and boosting exports through membership in the US-led Trans-Pacific Partnership trade talks and by pursuing free-trade agreements with the EU and others, but debate continues on restructuring the economy and reining in Japan's huge government debt, which exceeds 200% of GDP. Persistent deflation, reliance on exports to drive growth, and an aging and shrinking population are other major long-term challenges for the economy.

Source : CIA

Company name

NICHIA CORPORATION

REGD NAME

Nichia Kagaku Kogyo KK

MAIN OFFICE

491 Oka Kaminakacho Anan City Tokushima-Pref 774-8601 JAPAN

Tel: 0884-22-2311 Fax: 0884-21-0148

URL: http://www.nichia.co.jp/

E-Mail address: info@nichia.co.jp

ACTIVITIES

Mfg of phosphors for CRT, light emitting diodes, LED, other

BRANCHES

Tokyo, Nagoya, Osaka

OVERSEAS

USA (3), Taiwan (2), Malaysia, Netherlands, Germany, China (4), Singapore, Korea, India (3), Thailand, Hong Kong, Australia (--subsidiaries)

FACTORIES

At the caption address, Tatsumi, Tokushima, Naruto, Kagoshima

OFFICER(S)

EIJI OGAWA, PRES Noboru Tasaki, v pres

Hiroyoshi Ogawa, v pres Toshiya Iwashima, mgn dir

Gen’ichi Shinomiya, mgn dir Satoru Inufushi, mgn dir

Yen Amount: In million Yen, unless otherwise stated

SUMMARY

FINANCES FAIR A/SALES Yen 269,202 M

PAYMENTS REGULAR CAPITAL Yen 46,741 M

TREND STEADY WORTH Yen 442,349 M

STARTED 1956 EMPLOYES 6,808

COMMENT

MFG OF DIODES, PHOSPHORS, SEMICONDUCTOR MATERIALS, OTHER.

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

Notes: Unit: In Million Yen

Forecast figures for the 31/12/2012 fiscal term.

HIGHLIGHTS

The subject company was established by father of Eiji Ogawa for mfg phosphors for fluorescent lamps, which started in 1966. In 1968 concluded technical license agreement with General Electric, USA, which agreement later canceled in 1980 because of technical reasons (as reported by the firm). This is a specialized mfr of phosphors for CRT, light emitting diodes, optical semiconductor devices, other. Boasts No.1shares in each field. Holds about 35/40% market share in LED.

FINANCIAL INFORMATION

The sales volume for Dec/2011 fiscal term amounted to Yen 269,202 million, a 5% up from Yen 256,697 million in the previous term. Demand increased for fluorescent materials for use in plasma TV’s. Also increased demand for white LED for use in homes/offices. By divisions, Chemicals Div up 3% to Yen 61,424 million; Semiconductor Div up 5% to Yen 207,788 million. The recurring profit was posted at Yen 17,754 million and the net profit at Yen 31,135 million, respectively, compared with Yen 66,082 million recurring profit and Yen 40,525 million net profit, respectively a year ago.

For the current term ending Dec 2012 the recurring profit is projected at Yen 18,000 million and the net profit at Yen 32,000 million, respectively, on a 4% rise in turnover, to Yen 280,000 million..

The financial situation is considered FAIR and good for ORDINARY business engagements.

REGISTRATION

Date Registered: Dec 1956

Legal Status: Limited Company (Kabushiki Kaisha)

Authorized: 4.5 million shares

Issued: 2,146,209 shares

Sum: Yen 46,741 million

Major shareholders (%): Employees’ S/Holding Assn (15.2), Kyodo Iyaku Kenkyusho, (6.1), Tokushima Bank (4.9), Awa Bank (4.8), Shikoku Bank (4.8)

No. of shareholders: 257

Nothing detrimental is known as to the commercial morality of executives.

OPERATION

Activities: Manufactures chemicals (23.3%), optical semiconductor materials (76.6%).

49% of the products are exported.

Overseas sales ratio (49.2%)

(Handling Items):

Light Emitting Diodes: compound semiconductor materials, light emitting diodes, ultra

violet EDs;

Laser Diodes: laser diodes, phosphors, evaporation/coating materials, transition materials catalysts/organometallic compounds, magnets, fine chemicals, other.

Clients: [Electronic mfrs, wholesalers] Sanyo Electric Co, Sharp Electronics (M) Sdn Bhd Hong Kong Branch, Citizen Electronics, Panasonic Corp, LG Japan, other.

No. of accounts: 1,000

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Mitsui & Co, Panasonic Semiconductor Discrete Devices, Shin-Etsu Semiconductors, Tanaka Holdings Co, other.

Payment record: Regular

Location: Business area in Anan City, Tokushima-Pref. Office premises at the caption address are owned and maintained satisfactorily.

Bank References:

Tokushima Bank (Anan)

Awa Bank (Anan)

Relations: Satisfactory

FINANcIALS

FINANCES: (Consolidated in million yen)
			Terms Ending:		31/12/2011	31/12/2010
INCOME STATEMENT
	Annual Sales				269,202	256,697
	Cost of Sales				182,172	151,666
	GROSS PROFIT				87,030	105,030
	Selling & Adm Costs				38,848	33,874
	OPERATING PROFIT				48,181	71,156
	Non-Operating P/L				-30,427	-5,074
	RECURRING PROFIT				17,754	66,082
	NET PROFIT				31,135	40,525
BALANCE SHEET
	Cash				134,196	185,198
	Receivables				76,251	85,766
	Inventory				90,383	49,776
	Securities, Marketable
	Other Current Assets				6,175	5,930
	TOTAL CURRENT ASSETS				307,005	326,670
	Property & Equipment				155,694	124,685
	Intangibles				654	563
	Investments, Other Fixed Assets				39,063	42,593
	TOTAL ASSETS				502,416	494,511
	Payables				10,577	8,110
	Short-Term Bank Loans				11,467	10,696
	Other Current Liabs				15,131	33,086
	TOTAL CURRENT LIABS				37,175	51,892
	Debentures
	Long-Term Bank Loans				22,241	20,260
	Reserve for Retirement Allw				320	329
	Other Debts				331	860
	TOTAL LIABILITIES				60,067	73,341
	MINORITY INTERESTS
	Common stock				46,741	46,741
	Additional paid-in capital				32,755	32,755
	Retained earnings				363,880	339,184
	Evaluation p/l on investments/securities				3,719	5,655
	Others				(4,746)	(3,165)
	Treasury stock, at cost
	TOTAL S/HOLDERS` EQUITY				442,349	421,170
	TOTAL EQUITIES				502,416	494,511
CONSOLIDATED CASH FLOWS
				Terms ending:	31/12/2011	31/12/2010
	Cash Flows from Operating Activities				38,480	85,972
	Cash Flows from Investment Activities				-80,189	-57,394
	Cash Flows from Financing Activities				-3,685	-218
	Cash, Bank Deposits at the Term End				130,813	178,240
ANALYTICAL RATIOS Terms ending:					31/12/2011	31/12/2010
		Net Worth (S/Holders' Equity)			442,349	421,170
		Current Ratio (%)			825.84	629.52
		Net Worth Ratio (%)			88.04	85.17
		Recurring Profit Ratio (%)			6.60	25.74
		Net Profit Ratio (%)			11.57	15.79
		Return On Equity (%)			7.04	9.62

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.53.63
UK Pound	1	Rs.86.17
Euro	1	Rs.69.74

INFORMATION DETAILS

Report Prepared by :

SDA

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
----	NB	New Business	----

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.